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daser333 [38]
3 years ago
12

Weighted average cost of capital American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its

target capital structure. Currently it targets a 50​-50 mix of debt and​ equity, but it is considering a target capital structure with 70​% debt. American Exploration currently has 6​% ​after-tax cost of debt and a 12​% cost of common stock. The company does not have any preferred stock outstanding. What is American​ Explorations current​ WACC?
Business
1 answer:
saw5 [17]3 years ago
3 0

Answer:

American​ Explorations current​ WACC is 9%

Explanation:

The computation of WACC is shown below:

= (Cost of equity × equity percentage) + (after-tax cost of debt × debt percentage)

= (12% × 50%) + (6% × 50%)

= 6% + 3%

= 9%

Since we have to compute only current WACC so we considered the 50-50 ratio. Hence, we ignored 70% cost of debt

WACC shows a relationship between debt, equity and the preferred stock.

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3 years ago
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A manager checked production records and found that a worker produced 160 units while working 40 hours. In the previous week, th
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Answer:

A. 4; 3.83 units per hour

B. Increases by 4.44%.

Explanation:

Given that,

Current period:

Output = 160 units

Input = 40 hours

Previous period:

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A. Current period productivity:

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= 138 units ÷ 36 hours

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3 0
3 years ago
A manager wants to determine the number of containers to use for incoming parts for a kanban system to be installed next month.
Gennadij [26K]

Answer:

a. 1.51 containers

b. Fewer

Explanation:

The computations are shown below:

a. The number of containers would be

= Annual demand × time × (1 + inefficiency factor) ÷ holding pieces

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3 years ago
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